US Jobs Report: September 2019

Event- On a seasonally adjusted basis, total nonfarm employment rose by 130,000 in August, according to the US Bureau of Labor Statistics (BLS) in its monthly jobs report. Temporary help services gained 15,000 jobs for the month. The temporary staffing penetration rate remained at 2.00%. The national unemployment rate remained at 3.7%, as the labor force rose by over 500,000 over a record level in July.

Background and Analysis- On a year-over-year (y/y) basis (August 2019 over August 2018), total nonfarm employment was up 1.4%, and monthly job gains have averaged approximately 173,000 over the past 12 months. Temporary help employment was up 0.7% y/y, with mild monthly job gains of approximately 1,700 over the past 12 months.

Of the 15 major industry groups, 9 added jobs in August. The three that most drove total nonfarm employment growth (on a seasonally adjusted basis) were health & social assistance (+36,800), government (+34,000), and professional services excluding temporary help (+21,600). The three biggest decliners for the month were retail trade (-11,100), education (-5,400), and natural resources and mining (-5,000). The three biggest gainers in terms of y/y percentage growth were health & social assistance, construction, and professional services excluding temporary help (2.6%, 2.4% and 2.4%, respectively). Retail trade is the only category declining on a y/y basis (-0.5%).

Y/y growth in average weekly earnings bounced back to 2.9% for August, from 2.7% in July, though still below the average of 3.2% from the prior twelve months.

BLS Revisions- The change in total nonfarm payroll employment for July was revised from +164,000 to +159,000, and the change for June was revised from +193,000 to +178,000. With these revisions, total nonfarm employment gains were 20,000 lower than previously reported.

The change in temporary help services employment for July was revised from +2,200 to -7,900 and the change for June was revised from -900 to -2,900. With these revisions, temporary help employment growth was lower than previously reported by 12,100 jobs. These downward revisions nearly offset the growth of 15,000 jobs for August (after three months in which downward revisions more than offset any growth in the current month).

Staffing Industry Analysts’ Perspective- As the economic backdrop cools, we typically first see trends weaken among industrial jobs. After seeing weaker manufacturing trends from the Institute of Supply Management, it’s notable that industries heavy in industrial jobs such as natural resources/mining and transportation and warehousing declined for the month and have fallen out of the top 3 percentage gainers on a y/y basis, though construction seems to be holding up.

We also typically see trends first weaken in temporary staffing. Despite the attractive headline of gaining 15,000 jobs in August, the rise was nearly offset by downward revisions, and the industry is still down year-to-date in terms of jobs.

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Monthly Employment Situation September 2019 - You do not have permission to view this object.


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